First things first

Before the presidential candidates promise new programs and services from the federal government, they ought to explain how the U.S. is going to pay for the programs it already has.

Before the presidential candidates promise new programs and services from the federal government, they ought to explain how the U.S. is going to pay for the programs it already has.

Sometime this year, Medicare will begin paying out more in benefits than it takes in from payroll taxes, as the trustees of the Medicare program reported this week.

Soon, the same will happen with Social Security: By 2017, the benefits paid out will outpace the taxes taken in.

Some point optimistically to surpluses in the trust funds for both programs, but those monies exist only on paper. Though their books show the trust funds have money, in fact, that money was never set aside in a bank account or mutual fund or lockbox, from which it can be withdrawn as needed. Presidents and members of Congress spent it long ago on all the mundane programs the government operates, leaving a big IOU in place of cash.

That money will have to be replaced from general revenues, reducing the amounts available for all the other things the federal government does, such as defending the nation militarily, inspecting food, running the federal courts, sending the shuttle into space, operating welfare programs and maintaining federal highways.

In fact, the government is committed to spending $50 trillion more on Social Security and Medicare than it will collect in payroll taxes over the next 75 years.

The Democratic Congress and the Republican president can't reach a consensus on what to do to ensure the solvency of these programs, or even on whether something needs to be done. Meanwhile, 78 million baby boomers are starting to claim their retirement benefits. Behind them come another 60 million Generation Xers, those born between 1964 and 1979.

The only ways to balance the books are to raise taxes or cut benefits or some combination of the two. And the prospects are not good if millions of people approaching retirement find that Social Security and Medicare are no longer capable of providing the benefits they're counting on.

According a 2007 survey by the Employee Benefit Research Institute, more than a third of people over 55 aren't saving for retirement, fewer than half have tried to calculate what they need in retirement and about half have saved less than $100,000, excluding defined-benefit pensions.

Generation X isn't doing much better in that area.

The nation is not prepared to deal with the demographic onslaught that is about to swamp the retirement system. The presidential candidates should explain what they plan to do about it.